DBS Worried About Future Regulatory Fees

Other industries also took issue with the proposed fees. Cable trade groups said DBS fees aren’t high enough, while submarine cable companies and airlines said their regulatory fees are too high. The FCC needs to gather more information for proposals connected to the fees of radio licensees and TV broadcasters affected by the incentive auction, said NAB. The FCC needs to “consider how the spectrum incentive auction of television frequencies will impact regulatory fees for television licensees remaining after the auction,” NAB said.

If the commission eventually raised the DBS regulatory fee rate to match cable's 95 cents per subscriber, satellite companies would suffer “rate shock,” DirecTV said. “It would represent an unfortunate victory for a cable industry that has made a habit of trying to increase taxes paid by its competitors.” The Satellite Industry Association and jointly EchoStar and Hughes suggested there should be a cap on possible year-to-year rate increases for DBS, and Dish said there needs to be some sort of limiting principle on the fees, such as requiring them to be a set percentage of cable fees. Many of the satellite commenters said the FCC should align fees for satellite service licensees more closely with costs, and that the fees should better reflect the number of full-time employees involved in administering satellite matters as opposed to cable. “The Commission should also take immediate steps to assign direct and indirect costs in a manner that more accurately reflects benefits to the fee payer,” said SIA. Intelsat made similar comments, and also argued that DBS application fees should offset regulatory fees. Since DBS pays regulatory fees to both the Media and International bureaus, it shouldn’t be “blindly” lumped in with cable, DirecTV said

The agency should put more of the regulatory burden on DirecTV and Dish as national companies, said the American Cable Association and NCTA in a joint filing. To ameliorate DBS concerns about rate shock, the FCC could phase in higher fees over a three-year period, the cable associations said. “The FCC should established $0.24 as the satellite TV rate in fiscal 2015 and raise it by $0.24 each year over the next three years, with fee parity with cable achieved in fiscal year 2018 and maintained going forward,” ACA said in an email. “There are far more cable operators and cable systems than there are DBS providers,” said Dish. “Even if all other things were equal (and they are not), the total scope of regulation would be much larger for cable than it is for satellite.”

The commission should issue a Further NPRM to further study some of the issues associated with broadcast regulatory fees before changing them, said NAB. The FCC hasn’t shown any support for its proposal to reallocate fees between radio and TV broadcasters, and should examine how such fees would relate to the number of employees that administer the two industries, NAB said. “Without data on how current fees are calculated, we cannot discern whether any changes would be consistent with the Communications Act’s mandate.” Broadcasters also want the commission to study the auction's effect on such fees, NAB said. The incentive auction’s approach may mean more Media Bureau employees are doing work that is more associated with regulating wireless companies, NAB said. The commission also needs to study the effect the auction will have on broadcasting fees, since it will reduce the number of TV licensees, NAB said. “It is only fair that television stations be protected from unjust regulatory fee hikes that may otherwise occur through no fault of their own.” The FCC also shouldn’t eliminate population served or station type and class from its determination of radio fees, NAB said.

The FCC should reform its regulatory fee structure to “remedy the inequitable disparity in regulatory fees paid by providers and consumers of wireline voice service,” said ITTA. The “disparity” hurts consumers “least able to afford additional fees by increasing the cost of their home phone service,” ITTA said. “The time is ripe for the FCC to address this issue in a meaningful way.”

The FCC proposal to reduce fees for the submarine cable industry doesn’t go far enough, said the North American Submarine Cable Association and Submarine Cable Coalition. “Although NASCA and its submarine cable operator members are grateful for the Commission’s recognition that submarine cable system regulatory fees remain excessive, NASCA believes that the Commission’s pace of reform and reallocation remains too slow and is lacking in legal justification,” said NASCA. “There is no justification as to why such low-cost licensees are subject to assessments of over $150,000 per year, given the comparative lack of benefits they receive from the Commission’s regulatory activities when compared to other licensees,” said the coalition.

The NPRM proposes “an unjustified and disproportionate increase” for airlines and other aviation ground licensees, said a joint filing from the Aircraft Owners and Pilots Association, Boeing, Delta Airlines and others. The proposed fee increase “appears to lack any rational basis or supporting data,” the aviation groups said. The NPRM’s proposals would “unfairly over-recover from aviation ground licensees in a manner that could adversely affect their economic well-being,” the joint filing said.